Health Care Legislation

2023-2024 Health Care Roundup

A look at some important bills

BY Jennifer A. Forbes, JD, Jacob Gray, JD, and Jessica Anderson, JD

2023 Session

Pharmacy Benefit Managers On May 24, 2023, Governor Tim Walz signed SF2744, approving its numerous provisions regulating pharmacy benefit managers (PBMs). The cost of prescription drugs continues to rise around the country, and state legislatures often point to PBMs as the culprit. The United States Department of Health and Human Services reported that the average drug price increase was 15.2% between January 2022 and January 2023, or roughly $590 per drug, far outpacing inflation.

The average drug price increase was 15.2% between January 2022 and January 2023, or roughly $590 per drug.

SF2744 amends Chapter 62W to define “Clinician-Administered Drugs” as outpatient prescription drugs other than a vaccine that cannot reasonably be self-administered by the patient or an individual assisting the patient; and is typically administered by a health care provider in a physician’s office, hospital outpatient infusion center, or other clinical setting; and places certain prohibitions and restrictions on PBMs on how they administer benefits for these drugs. Common examples of these drugs include drugs to treat cancer, rheumatoid arthritis and macular degeneration. The law prohibits a PBM from requiring the use of a home infusion or infusion site external to the enrollee’s provider clinic or from dispensing a clinician-administered drug directly to the enrollee and requiring the enrollee to transport the drug to the provider for administration. This law went into effect January 1, 2024.

Although Minnesota, like many other states, continues its attempts to curb increasing prescription drug prices through legislative reforms, certain groups are concerned about the web of disconnected and confusing legal frameworks emerging as a result. Until Congress takes definitive action, however, states like Minnesota will continue to fill the void with their own legislative efforts.

Co-Pay Caps Another provision of SF2744 implements new cost-sharing limitations on prescription drugs to treat diabetes, asthma and allergies that require the use of epinephrine auto-injectors. The new law sets a cap on co-pays that a health plan can charge for these drugs at $25 for a one-month supply and for related medical supplies at $50 per month. This law goes into effect January 1, 2025.

Value-Based Purchasing Arrangements Governor Walz signed SF2995 on May 24, 2023, amending Minn. Stat. § 256B.0625 to allow the commissioner of the Minnesota Department of Human Services to enter into value-based purchasing arrangements with drug manufacturers under medical assistance or MinnesotaCare state plans. Value-based purchasing arrangements are alternative payment models including incentives such as discounts, rebates, price reductions and price guarantees that allow states to receive drugs at lower costs. Until federal rule changes in 2022, drug manufacturers were disincentivized from entering into these value-based purchasing arrangements with state programs. This law went into effect July 1, 2023.

Pricing Transparency On May 24, 2023, Governor Walz signed SF2995, creating Minn. Stat. § 62J.826. This new section of law requires certain medical and dental practices to make current standard charges available to the public in a uniform manner, specifically, using the format and data elements recommended for hospitals by the Centers for Medicare and Medicaid Services (CMS) and as specified by the commissioner of the Minnesota Department of Health. Practices covered by the new law are hospitals, outpatient surgical centers, and any other medical or dental practice that has revenue of greater than $50,000,000 per year and that derives the majority of its revenue by providing certain services including diagnostics, orthopedic surgery, anesthesia, and oncology. Hospitals must comply with the law as of January 1, 2024, and other entities by January 1, 2025.

2024 Legislative Session

Pharmacy Benefit Managers The legislature is not done with PBM reforms and could take up SF246 during the 2024 session. The bill contains sweeping changes under Chapter 62W to regulate PBM business practices. Among the most notable changes, the law aims to:



• Establish PBM reimbursement practices to ensure reimbursements to pharmacies at the same rate and using the same methodology as the PBM provides to other entities the PBM owns or controls, its “affiliates.”
• Prevent a PBM from charging fees to participating pharmacies for adjudication of claims, including for participation in the PBM network.
• Add a 45-day notice requirement and mutual agreement for changes to terms in existing contracts between the PBM and a participating pharmacy unless the change is required by law.
• Make changes to the administration of maximum allowable cost pricing, including ensuring PBMs cannot set a maximum allowable cost below the pharmacy acquisition cost.
• Significantly narrow the circumstances when a claim can be retroactively adjusted or denied.

There is a variety of ways to make your voice heard and extend your knowledge and expertise to lawmakers.

End of Life Option The End-Of-Life Option Act, SF1813/HF1930, would add Minnesota to the growing list of states that permit medical aid in dying. Authored in the state Senate by a physician, Sen. Kelly Morrison (DFL-Deephaven), the proposal would allow a mentally capable adult with a terminal disease predicted to produce death within six months to receive a prescription for self-administered, life-ending medication. To receive a prescription, a patient would have to follow a multi-step oral and written request process and consult with two health care providers. Although providers would not be required to practice medical aid in dying and health care facilities could prohibit the practice, an unwilling provider and/or health care facility would be required to transfer the patient’s medical records to a different provider or facility upon request. The bill also provides protection from civil and criminal liability for providers who engage in good faith compliance with the law.

Hospital Pricing Transparency A hospital pricing transparency bill, SF220, would require hospitals to make standard charges publicly available and in machine-readable format for the previous five years consistent with federal regulation under the Affordable Care Act and would impose significant state-based penalties on hospitals for violation of price transparency laws up to $5,500 per day. It should be noted that this provision was included as part of earlier legislation that was passed as part of SF2995. It is unclear how far SF220 will go as stand-alone legislation. As of this writing, SF220 has been introduced and referred to the Health and Human Services committee.



Managed Care Opt-Out SF404/HF816 allows all Medicaid recipients currently required to enroll in managed care the choice of opting out in favor of fee-for-service. Under current law, in place for 40 years, Medicaid enrollees are restricted to managed care plans with the opt-out choice given only to persons with disabilities. Advocates contend allowing Medicaid enrollees to choose would lead to fewer delays or denials and provide patient access to more culturally compatible caregivers. This legislation received significant bipartisan support in past sessions, passed through committees in both bodies and was initially included in SF2995 before being cut just prior to final passage. Bill authors and supporters hope this bill can once again proceed through the legislative process, but this time make it to the governor’s desk.

Health care continues to be at the forefront of legislative and regulatory change in St. Paul. With bipartisan interest in addressing rising prescription drug costs and health care pricing transparency both in Minnesota and across the country, we expect some form of the proposed legislation in these areas to get across the finish line in 2024. Minnesota’s constitution prohibits the legislature from meeting in regular session after the first Monday following the third Saturday in May. Accordingly, legislators will have until Monday, May 20, 2024 to complete their work. Many lawmakers will be returning home to campaign after the session ends. Members of the state House of Representatives will face voters in November. State Senate and gubernatorial elections will be held in 2026.

Take Action

As legislators seek to advance health care-related proposals this session, we encourage physicians to take part in the conversation. There is a variety of ways to make your voice heard and extend your knowledge and expertise to lawmakers. You can share your unique perspective with your legislators by phone, mail, or e-mail, or through an in-person visit. In-person visits are especially powerful and can be scheduled by contacting your legislator’s assistant. Additionally, you can track legislation of interest and sign up to express your support or opposition to the proposal during a committee hearing. Typically, individuals interested in testifying on a bill must submit their name to the relevant committee administrator in advance. You can find more information about your legislators, tracking bills, and the legislative process generally at leg.mn.gov. Physicians can also share their input on health care-related proposals with Governor Walz. Contact information for Governor Walz can be found at mn.gov/governor/. Some physicians may find that they prefer to advocate at the Capitol as part of a group, and we urge such physicians to explore opportunities offered by their professional association and to sign up for any advocacy alerts that may be available. Whether on your own or as part of a group, advocacy can be an easy (and fun) way to make a big impact on policy that will affect you, your patients and the health care system. We encourage physicians across the state to get involved this session.

We will continue to monitor the bills highlighted in this article and other proposed healthcare legislation throughout the remainder of this legislative session. If you have questions regarding how this legislation may affect you, please contact a member of the Kutak Rock health care practice group.

Jennifer A. Forbes, JD, is a partner in the Minneapolis office of Kutak Rock LLP.

Jacob Gray, JD, is an associate attorney in the Minneapolis office of Kutak Rock LLP.

Jessica Anderson, JD, is an associate attorney in the Minneapolis office of Kutak Rock LLP.